pLEASE ANSWER QUESTIONS!!

1-Describe what makes a cost “relevant” when making a decision between two alternatives.

2-Imagine you are a manager of a snack food company. You need to make a decision whether you should manufacture a new cheese curl or purchase it from another manufacturer and re-sell it to your customers. Discuss what factors are relevant in this decision and how you would make the right decision.

3-What is a constraint in a manufacturing process? Why does it make sense to concentrate on contribution margin relative to the constrained resource instead of contribution margin per unit in these cases?

4-The net present value method is used to evaluate capital investments. Describe this method. Be sure to address why the time value of money is an important component.

5-Describe the payback period method of analyzing an investment. What are two drawbacks to this method?

6-is the profitability index? Why is this better than the net present value method when you’re trying to compare investments of different sizes?

7-Describe the difference between horizontal analysis and vertical analysis. Provide one specific example for a horizontal analysis and one specific example of a vertical analysis.

8-What is liquidity? Name one ratio which would be useful in measuring a company’s liquidity. How is this ratio calculated?

9-Name a ratio which will help a company assess how it is doing with collecting its accounts receivable. How is the ratio calculated? Explain what it means.

10-Name a ratio that helps assess a company’s profitability. How is the ratio calculated? Explain what it means.